Articles

Your law firm runs on computers and, over time, your firm’s IT systems become outdated and security risks develop. Therefore, it’s critical that your firm undertakes a periodic evaluation and examination, so make sure all systems are working properly and risks are not left unchecked for extended periods of time.

In many cases, you’re relying on your COO, your IT Director and/or your outside service provider to manage the situation. However, that reliance does not replace your ownership of this responsibility. As the firm’s chief executive officer, you are the person ultimately responsible to ensure that the IT systems and controls are aligned with the firm’s goals and legal requirements and are being managed, maintained, updated and kept current.

This short article, written especially for managing partners, outlines what an IT audit covers and the questions you should be asking your COO and/or IT Director on a regular basis.

Law Firm MDPs (Multi-Disciplinary Practices) and New Delivery Models
by Susan Saltonstall Duncan

In the US (except for the District of Columbia), non-law firms are prohibited from providing legal services and non-lawyers are prohibited from law firm ownership. In the meantime, law firms in Canada, Europe and elsewhere are taking advantage of their more lenient rules and regulations that allow for MDPs in their jurisdictions. Up until now, the ABA has repeatedly struck down MDPs in the US, but are things likely to change in the foreseeable future?

In this set of articles, Susan and her team break the subject into three areas:

Part One: A Primer
This article provides some background on the topic, including the ABA’s historic position on MDPs.

Part Two: Subsidiaries
This article discusses wholly-owned law firm subsidiaries, such as lobbying, wealth management, and real estate title services.

Part Three: Integrated Multi-Disciplinary Practices
This one presents a much more comprehensive, integrated approach to provide a full array of professional services to clients, including recent efforts undertaken by Hogan Lovells and Duane Morris.

Although some large firms are testing the waters, we believe that fully integrated MDPS are not likely to be widely embraced by smaller and mid-size law firms in the foreseeable future.

Adhering to the concept that bigger is not always better, Roger leads a team of former “BigLaw” partners who’ve built an exceptional 30-lawyer firm in New York, one of the most competitive legal markets in the world. They are exceptionally client-focused and perform highly sophisticated work.

Roger’s article examines what tomorrow’s lawyers and law firms must do to adapt to the changing marketplace. Noting that BigLaw’s ability to change is akin to “turning an aircraft carrier,” he sees significant opportunities for smaller and mid-size firms to emerge as the real winners.

Although we’re seeing a gradual uptick in law firm strategic planning, fewer than half of mid-size law firms have them. Of those with a plan, firm leaders report improved firm performance despite so-so implementation efforts. Click here to read an article that John Sterling and I wrote for Legal Management magazine a few years ago on this topic.

So how is BigLaw doing when it comes to strategic planning? In this article, we learn that although almost every large US law firm has a strategic plan, they struggle with implementation, too. Here are some of the finding in the article:

Yet BigLaw struggles with implementation with only three percent (3%) of firm leaders indicating that their firms had achieved “almost all” of their planning objectives.

As you know, we believe that every law firm, regardless of size and practice mix, needs a firm-wide strategic plan that sets forth where the firm wants to go and how it plans to get there. Importantly, we advise firms to keep the plan simple, realistic and achievable focusing attention on just three short-term goals and objectives.

In December, we published MPF Insight (see below), a report that summarizes results of our Leadership & Governance Survey and presents recommendations to law firm leaders. Since then, The National Law Review has written a series of four articles presenting its analysis of and commentary about the report. The final installment covers succession planning, an often neglected aspect of law firm management. Consider the following:

For 63% of law firms, more than 50% of firm revenue is generated by lawyers older than 60 years.

30-40% of lawyers in private practice have begun the retirement process.

70% of first generation law firms do not survive their founding partners.

22% of firm leaders say they are grooming a successor for the leadership role.

If you and your partners care about legacy and the long-term sustainability of your firm, succession planning should be an ongoing process, and planning around the retirements of your key people should start much earlier than you think. Now is the time to start planning for the future.

This three-page report brings good news for smaller and mid-size firms! Despite the perceptions of many, the numbers show that litigation is holding strong in 2016 with no slow-down in sight according to Thomson Reuters’ Peer Monitor. Better yet, MidLaw (up 2% over 2015) is outperforming BigLaw in the demand for litigation when one looks at total billable hours across all time-keepers. Some key other findings in the report:

Reversing the recent trend, litigation is now closing the gap with transactional work for most firms that do both.

Some interesting data to consider as your firm develops its plans for the future.

Bottom line, here’s yet more evidence to suggest that corporations are more and more willing to give important matters to smaller and mid-size law firms. But it won’t fall into your firm’s lap. You’ve got to go out and get it!

Bob thinks a lot about law firm leadership. He’s former Chair of the ABA’s Law Practice Division and the ABA’s Diversity Committee. He also served as Managing Partner of his law firm, English Lucas Priest Owsley (ELPO Law, for short), for many years. In these roles, he thinks a lot about the unparalleled changes occurring in the legal profession, and he writes about what firm leaders can and should be doing to encourage change and drive innovation within their firms.

“In many ways, we’re our own worst enemy when it comes to advancing our law firms and in keeping up with what clients want and need,” says Bob. “We are truly in a change or die scenario. The sooner law firms realize this, the better prepared they’ll be to thrive.”

This is a strong, powerful article written by one of your peers. It should grab your attention.

The major accounting firms sell their brands. Not so at the big law firms, where the individuals are the brand. Consider how attractive law firm leaders would find a firm whose brand – its name, its systems, its process, its procedures, its consistency – trumps that of its individual lawyers. A firm that thrives despite partner defections because the individual lawyers follow a script orchestrated by senior management. Are “lawyer-proof law firms” the wave of the future?

Managing partners of the nation’s largest law firms are bullish about 2016 according to this annual survey of leaders of AmLaw 200 law firms. One-hundred four 104 firm leaders participated and were asked about overall conditions of the legal industry and their firm’s outlook for the coming year. This five-page article discusses survey’s findings. Among the highlights:

Ed has served as Managing Partner of Brooks Pierce, a 90-lawyer firm with three North Carolina office locations, since 2000. He focuses on law practice management and strategic leadership, and is especially interested in the evolution of the legal profession. In the face of unprecedented change, he likes MidLaw’s chances and discusses ten challenges for which they are well-positioned, including:

In this short article, Michael shares five emerging trends he’s been seeing in the marketplace for legal services. These early seeds of change present new opportunities for those law firms that act now and seize the moment. Here are the five trends he discusses in the article:

Clients want law firms to bring an institutional mindset to the relationship.

Law firms are beginning to teach associates the “soft- skills” of business development and client service.

More law firms are implementing client feedback programs to drive change. (We’ve been recommending client feedback programs for years!)

Can smaller and mid-sized law firms compete successfully with BigLaw in today’s turbulent legal market? History says yes, and we believe they can. This short article by the late Bruce Marcus sets forth ten ways to go about it, including:

When it comes to succession planning within a law firm, we often hear from managing partners: “I’m concerned that our young partners don’t have what it takes to run this firm in the future. They lack the drive, commitment and work ethic to become owners of the business.” And from young partners, we hear: “The senior partners won’t let go. They cling to control and won’t introduce us to their clients and referral sources.” Firms need to find ways to bridge the gap if they want to be around in 2020 and beyond. Sue shares her advice to help your firm manage its succession process.

This article discusses the difference between legacy law firms – those where the firm comes first and where there’s sharing, teamwork and investment in the future – and mercenary firms – those that operate more like a collection of sole practitioners sharing office space. August believes that law firms that lean toward legacy are better off in the long run. We agree. In the article, he offers suggestions on how you can move your firm in the right direction.

If you’ve been following us over the years, you know that we regularly survey firm leaders about topics relating to law firm leadership and management. And we consistently find that succession planning - in areas such as firm leadership, legal knowledge and expertise, and client relationships - is among the most neglected aspects in the business side of running the firm. In fact, most firm leaders give their firms poor marks in this most important area. In this article, we highlight finding of our most recent survey and offer best practices for succession planning and management. Here are few highlights of the article:

Seventy percent (70%) of first generation firms do not survive their founding partners

Elect a Deputy Managing Partner and charge him/her with important firm-building projects

You may recall that, back in March, our MPF Leadership Matters online survey asked about strategic planning and the keys to successful implementation. The results of that survey serve as the basis for our article that appears in the June issue of ALA’s Legal Management magazine.

The bottom line: More firms are embracing strategic planning than ever before – and they’re seeing positive results from their efforts.

Although the overall demand for legal services in the US has been flat (at best) since 2008, there are two ways that mid-size firms have outperformed BigLaw according to this report published in late March.

First, the demand growth for midsize firms is less volatile than for BigLaw and, second, realization rates are significantly better for mid-size firms than for AmLaw 100 firms.

The report also finds that there are opportunities for mid-size firms to capitalize on the increasing willingness of in-house counsel to feed work to smaller and mid-size law firms.

As Larry Richard’s extensive research reveals, lawyers hate change. They’re not too wild about risk either. And the characteristics that make them really good lawyers tend to make them not-so-good business people. But, as we all know, change is all around us. Globalization, technology, demanding clients and competition are having, and will continue to have, dramatic impacts on the business of law.

In this article, Aric reflects on the future of law and suggests that the wave of change affecting the legal profession has just begun. Is your firm ready?

Two MPF Advisory members – Mitchell Roth of Much Shelist and Ray Werner of Arnstein Lehr - are featured in this article appearing in the March 2014 issue of Chicago Lawyer. The article discusses a dramatic shift in the number and importance of legal work that traditionally went to BigLaw that is now finding its way to smaller and midsize firms. The reason? Not only a significantly lower rate structure, but also more flexibility and improved service. The article mentions a recent LexisNexis survey analyzing the legal spend of corporate America and we’ll feature the survey in a future MPF Weekly Update.

We start the year with a brief article from JD Supra that asks some of their leading contributors for their thoughts about law firm priorities for the New Year. Most talk about the need for firms to look ahead (not behind) and enthusiastically embrace the changes necessary for long-term success.

We’ve recently seen several high-profile cases where the US Government, along with companies like CitiBank, Target, and American Express, have fallen victim to cyber criminals. There have also been a few instances involving prominent law firms. Can you imagine having to tell your clients that your firm’s data has been breached?

So, just how vulnerable is your law firm? To find out, read this article. Then schedule a meeting with your IT Director to make sure your firm is doing all it can to assure a safe and secure working environment.

Here's a short but hard-hitting video that hammers home the dramatic changes in the legal industry over the past decade. We suggest that you play it at your next partnership meeting and ask your partners what they think. If this doesn't get their attention that your firm needs to change, nothing will.
The video is produced by Re-ThinkLaw.org, an initiative launched by an outfit called Axiom. Stay tuned.

After 25 years in the legal industry, I often find myself working with firms that are long on planning, yet woefully short when it comes to implementation. My advice? Pick just three meaningful initiatives, dedicate the required resources, and assign a responsible partner – not a committee – to make sure each initiative is accomplished. And follow the advice is Gerry's brilliant article.

Despite uncertain US and global economies, leaders of the nation's largest law firms are feeling surprisingly upbeat about 2013, with 75% describing themselves as "optimistic" about the year ahead. For ten years now, The American Lawyer has surveyed the managing partners of the nation's 200 largest law firms to get their take on the legal industry in the coming year. Some other highlights:

Along with Robert Young of Lucas English in Bowling Green, Kentucky, I was featured in this article that appeared in a recent issue of LawyersUSA. In it, I talk about research we've conducted at MPF affirming that law firms that develop and implement strategic plans outperform those that do not.

Of the dozen or so characteristics of today's most successful law firms, succession planning is perhaps the most often neglected. Yet, succession should be an important element in many firm-wide strategic plans. Succession can be viewed in the context of firm leadership, client relationships and organizational involvement. It involves identifying and grooming future firm leaders, and rewarding retiring partners for successful transition, not just personal productivity.

In this thoughtful and well-researched article, Jim writes that law firms would benefit greatly from long-term planning and that succession - critical to sustainability - should command leadership's full attention. We couldn't agree more.

David Maister writes some really good stuff and you'll find lots of his books and articles featured on our Website. This particular article discusses things like mission, vision, values and culture in the context of a law firm. It's a great article to circulate among your partners in advance of your next Firm Retreat. It will get them thinking about a whole bunch of issues, including the rules and codes of conduct (if any) by which your firm and its professionals live.

Peter Marlette, Managing Partner of Damon Morey in Buffalo, New York, has recently joined the MPF Advisory Board. This outstanding article, which originally appeared in the New York Law Journal, is must reading for leaders of mid-size law firms. It discusses the exciting opportunities for mid-size firms in today's marketplace for legal services. Among his recommendation: Adopt and implement a firm-wide strategic plan, and become active in the right law firm network. His firm is a member of ALFA International.

"A leader's lasting value is measured by succession," says leadership author and guru John Maxwell. Tom Grella, a long-term member of the MPF Advisory Board, puts his spin on the topic from the perspective of managing partner of a mid-size firm. Importantly, he writes about the role of current firm leadership in the process. Tom is Past Chair of the ABA's Law Practice Management Section. This article appears in the May/June issue of the ABA's Law Practice magazine.

There is no definitive answer to the question of exactly how long an outgoing leader should stay in office after announcing his or her departure. Many management experts advocate a swift transition to avoid lame-duck syndrome or firm drift. However, one-on-one interviews with dozens of firm leaders reveal a very different approach.

For new managing partners, the responsibilities are multi-faceted and the stakeholders are diverse, both within and outside the firm. This article looks at the most common mistakes, the biggest challenges, some unanticipated surprises, and how to avoid them.

Our friends at LexisNexis have published a series of papers on best practices in the “business of law.” This one looks at best practices in the accounting profession that can be helpful to law firms, especially smaller firms.

This short article provides some practical guidance on how to transition the role of managing partner through thoughtful policies procedures to encourage a smooth, efficient, multi-year transition of leadership.

We are strong advocates for strong, competent, business-minded administrators in law firms. Management. Marketing. Finance. Human Resources. Technology. They make the trains run on time, and they make the firm more money. This article talks about the critical role of firm administrators from the perspective of three managing partners - from small, mid-size and large law firms. One thought we especially like: "Acting like a partner, that is like an owner not an employee, goes a long way toward helping the administrator get a seat at the table."

From strategic planning to effective committee structure, this two-pager gets right to the point. Although simple in concept, these rules are not always easy to apply and follow. But the most successful organizations do....including law firms.

After steep declines in 2008, both revenue and profit for mid-size US law firms have leveled off and remained flat in 2009-10, according to the just-released 2010 edition of this annual survey. With participation from 187 law firms, it's one of the most important and comprehensive economic surveys for smaller and mid-size firms.

Over half of in-house counsel - 56%, to be precise - say there has been a "sea change" in how fees are paid to outside counsel. Prompted by the pressure to reduce the overall cost of legal services and fueled by the ACC's Value Challenge, the time seems right to affect change. Yet, the gap remains wide between the perception of fundamental transformation and the actual practice.

Much ado has been made over the new partnership between Best Lawyers in America and US News & World Report to present their version of law firm rankings. We'll be writing more on that topic in a soon-to-be-published MPF White Paper. In any event, there are a few thoughtful articles on their website including this one. And it's good news for smaller and mid-size law firms.

Do you and your partners have a written, cohesive firm strategy? Or are you merely sharing office space with other sole practitioners? Strategic planning is the key differentiator, but it's not for the faint of heart.

Now just might be a great time to recruit talented young lawyers away from the big law firms. This survey of 5,092 mid-level associates at AmLaw 200 firms reveals that they are not happy campers these days. Stagnant salaries, reduced benefits, poor internal communication and increasing workloads are the primary reasons. The number looking for a new job has doubled in the past year, with half looking for a better "life/work balance."

Here's an interesting study that puts law firm billing practices under the microscope. It examines invoices received by 36 large corporate clients finds that location and firm size - not lawyer expertise - are the biggest determinants of a lawyer's hourly rate. It also concludes that 75% of proposed rate hikes are accepted, and that a lawyer with the title of "partner" can charge up to $100 more per hour than an "associate" with the same experience.

Good news for smaller and mid-sized firms, according to this article which appears in the current issue of Inside Counsel magazine. According to a recent survey of over 550 in-house counsel, 65% say they have retained more smaller, regional firms over the past two years. The reason? Lower price tag for legal services. But there is even better news. They say they will continue using smaller firms, even after the economy improves.

There are three common reasons why law firms fail, says this article that appears in the June edition of ABA's Law Practice magazine. Lack of leadership. Lack of strategic focus. Lack of financial discipline. Don't let your firm be among those that fall apart or seek refuge through an acquisition.

In this recently published article, MPF Faculty member Bob Denney says more and more law firms are focusing attention on leverage, associate development, alternative fee agreements and firm management. In our travels about the country, we see the same trends, as well.

It's hard to believe but, even during the worst economic recession in over 70 years, US law firms managed to increase their billing rates in 2009. The average was 2.5% according to a recent survey of the nation's largest law firms conducted by The National Law Journal. That increase compares to a 7.7% rate climb in 2007 and 4.3% in 2008. The survey also indicates that a larger percentage of revenue for most firms was generated from alternative billing arrangements.

According to research conducted by Samford University's Cumberland School of Law, 55% of lawyers in private practice admit to overbilling on occasion. The temptation only becomes more severe as there is less work to be dome. Don't let this happen at your firm! Not only is the practice unethical, it may also cause irreparable damage to one of your firm's most valuable assets - its reputation.

Recession or not, this article from Law Practice magazine includes fifteen really good ideas for lawyers of law firms, regardless of firm size or practice mix. Many of Linda's suggestions focus on client service and business development. None of them involve rocket science.

Succession planning is neglected by far too many law firms. In fact, most managing partners - 74% to be exact - do not have an exit strategy when they take the job. This helpful article provides seven thoughtful suggestions to smooth the transition when you're ready to pass the baton.

The law firm merger market is starting to reawaken according to separate reports published by Hildebrandt International and Altman Weil. Although both reports show that firms aren’t ready to resume the highly aggressive growth strategies contemplated just 18 months ago, the market has started to heat up again. However, "it has turned from a seller’s market to a buyer’s market when it comes to acquiring small firms,” says Altman Weil consultant Bill Brennan.

The world’s largest law firms are starting to enjoy the rebounding economy. According to this article from the UK’s Law Society Gazette, profits per partner are up sharply – 18% for the world’s ten largest law firms and a whopping 41% for firms in the 11 to 25 spots – since January 1st says a just released research report by PricewaterhouseCoopers. The report says that “profit margins also saw a boost in firms of all sizes.”

Henning asks "Will it take a revolution to change the way law firms operate?" Will today's current economic crisis force law firms to rethink the old model of annual hourly rate increases? Radical ideas may not only require a change in business model, but a change to the code of professional responsibility.

This two-part Lex Mundi article focuses on what law firm leaders can do to deal with the downturn through both aggressive law firm economics and strengthening client relationships. The suggested practices can help firms survive the downturn and strategically position themselves for the recovery.

Does this recession remind you of anything? Perhaps it's the same phenomenon we experienced 15 years ago when the dot com industry went bust? Learn what's changed in the legal marketplace since the last recession and what lessons remain the same.

A great article for firm leaders about the implementation side of the strategic planning process. Giuliani says fuzzy goals, a lack of genuine commitment and an unwillingness to deal with tough issues often hamper successful implementation.

If your firm has never gone through the strategic planning process, this is the article for you! It starts off explaining the basic "whys" and "hows" of planning, but goes deeper into the importance of focusing externally as well as internally. Mudrick was a member of the MPF Faculty for several years before joining Phoenix-based Jennings Strauss as COO in 2008.